Should I consolidate

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  • duran68
    duran68 Posts: 13 Forumite
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    shiwen55 wrote: »
    See if the loan APR is less than a balance transfer card fee, I'd go for it else balance transfer them

    Balance transfer fee is 1.4% ;the loan was 8% apr
  • phillw
    phillw Posts: 5,594 Forumite
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    YorkshireBoy wrote: »
    1. You MUST pay £250 per month towards the cards (you said you could, remember), even though they're 0% interest. You never know what's around the corner! And if you can't/don't, then that's proof that a 5-year consolidation loan wasn't a good option to be considering!

    I would always leave 0% cards on minimum payment and setup a regular saver account as a repayment vehicle.
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,594 Ambassador
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    Good news that you are able to get a balance transfer card. Doing that is always preferable to debt consolidation loans and I would expect the debt would be repaid in much less than 5 years.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
  • Sncjw
    Sncjw Posts: 3,509 Forumite
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    Have actually been offered 8% or is that the representative rate?
    Mortgage free wannabe 

    Actual mortgage stating amount £75,150

    Overpayment start date 1/3/23.

    Starting balance £66,565.45

    Current balance £63,787.16

  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
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    phillw wrote: »
    I would always leave 0% cards on minimum payment and setup a regular saver account as a repayment vehicle.
    Me too, but I've never been in debt*, manage my finances well, very organised, disciplined. Not everyone is.

    But taking the OP's situation...

    The difference between minimum and fixed is around, say, £50 per month.

    They could open a current account somewhere to gain access to a 5% regular saver, fund it each month (up to £1,750), maybe switch a couple of DDS (in the case of M&S), etc. They'd then deposit the £50 each month. And at the end of the year they'd have earned interest to the value of...

    (£50 x 12) x 0.05 / 12 x 6.5 = £16.25

    Even if the difference was £100 per month then that will still only return £32.50 after a year. In the OP's shoes I'd be concentrating on increasing my earnings/cutting my spends rather than chasing small returns from regular savers.


    * Well I have, but it was credit card stoozing debt to the tune of circa £80,000...but I always had at least £80,000 in a savings account to cover it.
  • duran68
    duran68 Posts: 13 Forumite
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    Sncjw wrote: »
    Have actually been offered 8% or is that the representative rate?

    Yes offered 8%
  • phillw
    phillw Posts: 5,594 Forumite
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    YorkshireBoy wrote: »
    Even if the difference was £100 per month then that will still only return £32.50 after a year. In the OP's shoes I'd be concentrating on increasing my earnings/cutting my spends rather than chasing small returns from regular savers.

    I wasn't saying it would solve their financial problems. I would expect someone to already have cut out all non essential spending and reduced essential spending to a bare minimum by this point.

    Increasing your earnings would normally take a lot of effort and unless you're in a position where you can just ask your boss for more money or go from part time to full time, then it's going to take a lot of effort & spending a few minutes sorting out bank switches and regular savers to get some extra money in is worth it before your life turns into work/eat/sleep.
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